FedEx Corporation (NYSE:FDX) shares gained sharply in Thursday’s extended trading after posting far stronger than expected profits in its fiscal third quarter.

finviz dynamic chart for FDX

For Q3, the Memphis-based transportation company posted $3.41 in earnings per share well above the $2.74 consensus expectation. Meanwhile, $22.22B in revenue fell short of the $22.74B consensus. The company noted that “continued demand weakness, particularly at FedEx Express” impacted results in the quarter, impacting top-line performance. FedEx Ground and FedEx Freight operating results improved significantly despite volume declines, which was credited to efficiency improvements.

“I am proud of the FedEx team, who delivered outstanding service to customers during our peak season while also making solid progress on our transformation initiatives,” CEO Raj Subramaniam commented. “We’ve continued to move with urgency to improve efficiency, and our cost actions are taking hold, driving an improved outlook for the current fiscal year.”

Management hiked its full-year forecast to a range of $14.60 to $15.20 as compared to the prior forecast of $13.00 to $14.00. The new guidance range is also well above the consensus of $13.62. A capital spending forecast of $5.9B was maintained and remained in-line with analyst expectations.

“We are building momentum through our cost and efficiency initiatives to improve profitability,” CFO Michael C. Lenz said. “Our improved earnings outlook demonstrates confidence in our ability to execute while managing the continued global volume softness we are experiencing across the business.”

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